By Ann Koh and Ben Sharples July 16 (Bloomberg) -- Crude oil was little changed near a one-week high as equities rallied and China’s economy showed signs of rebounding from its weakest growth in almost a decade. Oil traded above $62 a barrel today as U.S. and Asian stocks gained after Intel Corp. forecast sales that beat analysts’ estimates and gauges of manufacturing improved. China’s gross domestic product grew 7.9 percent in the second quarter as the nation became the first of the major economies to rebound from the global recession. “This will revive demand growth we saw in China last year, especially with better-than-expected automobile sales in the first half of this year,” said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong. “If you go to Shanghai or Beijing now, you will see a lot of billboard advertisements for interest-free loans to buy new cars.” Crude oil for August delivery was at $61.61 a barrel, up 7 cents, on the New York Mercantile Exchange at 1:06 p.m. in Singapore. Earlier, the contract rose as much as 47 cents, or 0.8 percent, to $62.01 a barrel. Prices, which have increased 38 percent this year, jumped 3.4 percent yesterday to $61.54, the highest settlement since July 7. The Dow Jones Industrial Average yesterday climbed 256.72 points, or 3.1 percent, its best gain in three months. The Standard & Poor’s 500 Index added 3 percent in New York, extending its biggest three-day advance since March. The MSCI Asia Pacific Index rose 1.6 percent to 103.19 as of 1:03 p.m. in Tokyo, taking its three-day gain to 5.2 percent. The index has risen 46 percent from a more than five-year low on March 9. Stocks Climb The Shanghai Composite Index rose 22.74, or 0.7 percent, to 3,211.30 at the 11:30 a.m. local-time break. China overtook Japan as the world’s second-largest stock market by value for the first time in 18 months, as government spending and record bank lending boosted share prices. China’s industrial production increased 10.7 percent in June from a year earlier, the largest gain in nine months excluding seasonal distortions. Retail sales climbed 15 percent. U.S. crude inventories fell 2.81 million barrels to 344.5 million last week, the Energy Department said yesterday. “The huge rally across the board in equities helped boost crude oil,” said Mike Sander, an investment adviser with Sander Capital in Seattle. “The weekly EIA report showed a drop in crude oil inventories by 2.8 million barrels, which lent support to higher crude prices as well.” Oil Stockpiles Crude stockpiles were forecast to decline 2.1 million barrels, according to analysts surveyed by Bloomberg News. Refineries operated at 87.9 percent of capacity, the highest since August. “Crude oil is not in any shape to make another run at $70 and looks to remain near $60 with a possible downside risk,” Sander said. Gasoline inventories climbed 1.44 million barrels to 214.6 million, the highest since April, the Energy Department report showed. Supplies were forecast to increase 875,000 barrels. Gasoline for August delivery gained as much as 1.1 cents, or 0.6 percent, to $1.7190 a gallon on the New York Mercantile Exchange in New York. Supplies of distillate fuel increased 553,000 barrels to 159.3 million in the week ended June 10, the highest since January 1985, the report showed. A 2 million-barrel gain was forecast, according to the median of 14 estimates by analysts in the Bloomberg News survey. Brent crude for August settlement was at $63.03 a barrel, down 6 cents, on London’s ICE Futures Europe Exchange at 12:55 p.m. in Singapore. To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net

Source